Despite its makeshift location, Shanghai Tang is not poverty-stricken -- it has seven other outposts in Hong Kong, not to mention plenty of business savvy and a powerful owner (the Richemont Group, a Swiss company that also controls other high-end brands like Cartier, Van Cleef and Arpels, Piaget and Montblanc).

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Illegal outposts are usually much smaller and not so well established.

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But few supermarkets are lobbying for a permanent change in the regulations, not least because they now have thousands of smaller outposts around the country.

ECONOMIST: Sunday retail: Talking shop | The